In company news, Corus (CGA) (+6.84%) kept its lead among the Footsie percentage gainers with Tata Steel winning the auction with a £6.2 billion offer for the steelmaker. Among other heavyweights, mobile phone giant Vodafone (VOD) (+0.68%) said it added 8.7 million new customers in the third quarter, ahead of a forecast of 7.5 million.

BSkyB's (+0.18%) 10% rise in first half revenues was in line with analysts' expectations. Insurer Friends Provident (-3.98%) said 2006 life and pensions sales rose 31% in 2006. F&C Asset Management (-17.81%) plunged after saying its AuM at Dec-end fell to £104.1 billion from £105.8 billion at the end of September. Kingfisher (+1.81%) gained on a JP Morgan target upgrade. Pearson (PSO) (-1.72%) dropped on a lowered JP Morgan recommendation.

France: The CAC 40 index (-0.66%) closed in the red. Sanofi (SNY) (-1.6%) weighed heaviest on the CAC 40 on news that Bristol-Myers (BMY) hired several banks for advice on a possible takeover bid by Sanofi. Michelin (-2.7%) fell on a five-month high in natural rubber prices. PSA (-2.42%) and Renault (-1.5%) were both hit by the recent surge in oil prices, with EIA inventories adding misery.

Germany: The Xetra-Dax index closed flat on Wednesday. Of local note, German retail sales rose more than expected: 2.4% in December in real and seasonally adjusted terms, according to preliminary data from the Federal Statistics Office. Weighing on Metro (-1.74%), though, was a downgrade to neutral by JP Morgan.

Among the gainers: Deutsche Bank (DB) (+1.0%) rallied after it announced a dividend increase of €0.60 to €4 per share ahead of its results tomorrow. In earnings, Heideldruck's (-4.15%) third quarter EBIT fell short of expectations, coming in 16.7% higher year-over-year at €84 million. A consensus view was for €94 million quarterly operating earnings at the world's largest printing machine maker.

Norddeutsche Affinerie (+2.29%) posted first quarter EBT of €39 million, up 77% year-over-year. Quarterly sales rose nearly 60% to €1.47 billion. Europe's largest copper producer said it is well positioned for the full year. Results aside, Milano Finanza wrote that Lufthansa (-1.38%) may be behind Unicredit's expression of interest in taking over the Italian government's stake in troubled Alitalia.

Elsewhere: The Nordic bourses finished mixed on Wednesday. Stockholm turned lower and joined Helsinki in negative territory, while Copenhagen shot ahead of Oslo, finishing as the best European performer.

The AEX index slipped lower still and finished trading as one of the worst performing European indices.